This past week has been a flurry of activity between Apple and the U.S. Justice Department about unlocking an iPhone used in the San Bernadino terrorist attack. It is a profound question, and not a new one. Apple’s response so far has been consistent with the brand bond it has with its loyalists… that the relationship with consumers takes precedence.

In the New York Times, Eric Lichtblau and Matt Apuzzo cite that Apple’s refusal “appears to be based on its concern for its business model and public brand marketing strategy” rather than a legal rationale. They are partially correct. Apple knows that it is in the “relationship” business… and will, at all costs, defend that relationship with its consumers.

In a recent post, we focused on “Why Authenticity Matters”. As we wrote, “Authentic brands do what they say. Their behavior is consistent with their promises”. Apple is being true and authentic to its very reason for being. In the face of the immediacy of a legal challenge, it has deferred to its brand before compromising.

There is no question that this issue is complex. From a technical and legal standpoint, opening up the code could set a significant precedent that could have broad impact across many companies with strong intellectual property as a basis for their differentiation. Imagine some people being poisoned by drinking Coca-Cola and the company being asked by the Justice Department to reveal it’s 130 year-old, secret formula for the purposes of helping in a criminal investigation. This example isn’t as emotionally loaded as dealing with a terrorist situation, but the precedent is similar.

On the other hand, any way the authorities can gather information to thwart terrorist activities is a good thing to do. So this becomes a thorny problem.

There is no question that Apple needs to find a way to help the Justice Department without compromising its bond with consumers. Reading between the lines, both Apple and the Justice Department have essentially acknowledged this. The question is how to provide this information while protecting the Apple brand. I am confident, once the bluster dies down, this will be accomplished.

Generation Y Should I Trust You? The Challenge for Brands

Brands are symbols of trust – we use them as navigation beacons in a landscape of uncertain options. But the next generation of consumers is re-defining what it takes to be trusted.  At the core of this re-definition are two attributes: sustainability and authenticity. Brands that lack those qualities will struggle increasingly to attract either consumers or recruits.

According to research by The Intelligence Group, this next generation of consumers, described as Generation Y or ‘Millenials’, want to make the world a better place, and they’re demonstrating this intent in the brands and products they choose, ‘… products that follow ethical practices and are aligned with social causes’. (adweek: responsible youth)

For these digital natives, sharing is a normal part of life. Everyday they share photos, ideas, technology and information about themselves.  Defined by The Cloud, a key facilitator of this ‘open source‘ lifestyle is mutual trust and the brands that can demonstrate the qualities that drive trust, like honesty and authenticity, will benefit from Generation Y’s loyalty.

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What can the difference between a straight line and a circle teach us about building a sustainable economic system that fuels growth without destroying our planet? And what do brands have to do with it?

The answers are “lots” and “lots”, respectively.

This is the first in a series of posts in which we will explore the relationship between brands and sustainability. So we thought we should start by questioning whether consumerism itself is sustainable. Is it reaching the end of its useful life? And if it is, what can replace it as an engine for economic growth?

The law of unintended consequences has meant that the existing model of consumption makes many of us sick, unhappy, stressed, and time-starved; it fails to produce affordable food that sustains healthy life; it fails to offer work that gives us a healthy sense of meaning and purpose; it gradually renders the planet itself unviable; and it makes only 1% of us wealthier.

For most of us, this is not a good deal. For our children, it’s disastrous.

In his book ‘Cradle to Cradle’, William McDonough recognized that in nature’s cyclical design, resources are infinite.  Yet human industry is driven by a traditional linear economic model: Take (resources) – Make (stuff) – Dispose (dump when the new version comes out).

So which is the better (more sustainable) option? That’s where the circle comes in.

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David Brooks, an Op-Ed Columnist at the New York Times writes a very interesting article about the differences between the use of and understanding of brands between the Americans and the Chinese. His premise is that the Chinese are not good at building brands that connect with consumers in the West despite the fact that they have the largest economy in the world. This will hinder their achievement of global economic dominance. He is right.

However, one of his notions is only partly correct and flies in the face of what great brands work hard at every day. Brooks believes that “People who create great brands are usually seeking some inner longing of their own…”. In this he is thinking about romantic notions of founder-led brands like Nike or Ralph Laruen.

What he is missing is that great business leaders spend a great deal of time and energy to understand their customers and their needs, and then address them in a way that builds an enduring relationship that can last a long time. In most cases it is the diligence and hard work requiredto build stronger relationships with consumers than competitors in every category that leads to sustainable market leadership.

Much of what Brooks writes about is very true, and he is astute to recognize as much as he does. Where he misses the mark is realizing that there is a process and method to establishing and building a strong brand that connects with key audiences that works on it’s own and is not necessarily founder led. Just look at a few minor brands like IBM, General Electric, BMW, New York Yankees, Mayo Clinic, etc. Sure each was founded by great thinkers and leaders, but they have evolved into very strong brands generations past founder longing.

Congrats to Brooks for recognizing how brand have become an engine of the Western economic growth. His basic premise is more than correct.

To ensure a seamless image, smart brands take responsibility for both the content of their ads, as well as the environment in which their ads appear.

Vigilance is especially necessary online, where intelligent software and e-marketing technologies allow brands to target the user, not the environment. The old adage of ‘fish where the big fish are’ has never been more true. With varying degrees of success.

A friend of mine recently joked on Facebook: ‘If the ads that Facebook so cleverly targets at me are correct, I need to: a. Lose 9kg. b. Buy a motorbike and c. Attend the classic rock concert at Willowbridge Barnyard Theatre. Now that’s artificial unintelligence if ever I saw it.’

She’s a fit, slim, married, mother of two in her 40s, who lives in the suburbs and drives a family-friendly 5-seater VW.

But getting it wrong can have more sinister results. What happens when a brand finds itself in an online environment that potentially undermines its image? [Read more →]

As the old saying goes, “you have to be in it to win it”. That pretty much sums up the role of social media for brands today. Social media is no longer just one of many tools a marketer can use. It has all but become the cost of entry. In the 2012 Social Media Marketing Industry Report, 94% of marketers said that they use social media for marketing purposes. It goes without saying that some social media marketing is better than others, and therefore more effective at driving business results. But the bottom line is that companies can no longer ignore social media. This is true for every category and industry from consumer goods to professional services, from healthcare to the financial industry and for both B2C and B2B.

Here’s the rub: Because social media is a two-way street, gone are the days when a brand can control messaging through a monologue of traditional advertising and communication. What is compelling to consumers today, and to a large extent, expected, is a dialogue, back and forth. These conversations can be strategically initiated by the brand to disseminate a particular message, i.e. a new way of “advertising”, or a brand can strategically participate to help steer the conversation in a way that protects the brand.

Either way, whether you are creating the conversation about your brand, or joining in conversations about your industry, which may ultimately involve your brand, follow these rules to not only protect your brand, but to take advantage of this new reality and use it to actually strengthen your brand:

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The postulate that “watering down” a brand has long-term affects is generally well understood by smart marketers everywhere. But recently, two brands have been caught up in literally and figuratively watering down their products and consequently, their brands. We’d suggest that the act of watering down a product, or even the suspicion of it, will have very serious and long-term impacts on the business.

The two brands are Maker’s Mark Kentucky Bourbon Whisky and Budweiser. Maker’s Mark announced that they were lowering the alcohol content of their premiere product from 94 proof to 86 proof because demand is exceeding capacity, and consumer testing had indicated that the difference was undetectable. While possibly statistically true, the idea that slowly diluting a product so that the perceived change in the taste profile is negligible could end up taking the teeth out of a product and without ever understanding why. This incremental product thinking almost always gets manufacturers in trouble. [Read more →]

And if it does survive, will it ever be as strong as it was again? It’s difficult to know for sure but one thing is clear: the marketing leadership at Hostess Brands had failed to nurture a brand that is undeniably an American icon with a value far greater than it’s $68 million year-to-date revenue. After all, how many brands can invoke nostalgia like Twinkies has in recent days? How many brands have such an impact on society that they end up on the front page of the Wall Street Journal or a feature on every major news program? Not many when you consider the thousands of brands out there, and yet, the marketing leadership at Hostess Brands has done little over the past few decades to understand, let alone capitalize on the equity.

Twinkies was introduced in 1933 by The Continental Baking Company in Inianapolis to utilize the strawberry shortcake machines that stood idle when strawberries were not in season. They were originally filled with a banana flavored cream but switched to vanilla cream during WWII when bananas were rationed. It was so popular that they never switched back.

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For those living through the “Perfect Storm” of October 2012 that hit the East coast of the U.S., we all, collectively, had our senses heightened out of need. Many had no electricity, the coast had severe flooding, wind damage was everywhere and there were all manner of challenges in the days following the storm. What I found interesting is how some well-known “brands” comforted my soul as the winds howled and the storm raged on.

For example, we heated up Campbell’s Chicken Noodle and Tomato soup in the evenings over a propane stove. More than the warmth of the soup, the Campbell’s brand enveloped us with a smile and a comforting feeling that all would be OK. It was like a grandmother’s hug.

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Heineken is introducing a new, taller bottle in the U.S. in order to help it’s flagging sales. It is a smart move on many levels, and it will be successful.  But imagine the internal debate about change.

Heineken Lager Beer was established in 1873 in the Netherlands, and still uses the same recipe. It was the first beer imported into the U.S. after prohibition, in 1933, and has been a consistent bell weather brand. But while they once commanded a leading share of imports, Corona, craft beers, and even traditional competitors have introduced newer packaging and flavors, and Heineken has suffered. Today, Corona outsells Heineken almost 2 to 1. So it was out of necessity Heineken considered an alternative to the squat green bottle that has been their structural heritage. Funny how competition pushes a brand to better understand it’s equities.

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